Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Monday, February 06, 2006

Budget Smoke and Mirrors

Stan Collender gives the straight poop on the Bush 2007 budget:

BUDGET BATTLES FY 2007 Budget: One Hand Clapping: President Bush’s fiscal 2007 budget is far more likely to be the fiscal equivalent of a tree falling in the woods when there is no one there to hear it.... [T]he Bush 2006 budget was submitted shortly after the president had been re-elected and a Republican majority... returned.... [T]he president thought he had more than enough political capital to tackle some very big and extremely controversial ideas, and put Social Security and the tax code on its reform agenda.... Bush tried, and failed. And because of Iraq, Afghanistan, the tsunami, and Katrina, the deficit got worse....

So the White House took a different tack with its fiscal 2007 budget... small changes are in. That’s why the Bush fiscal 2007 proposal includes about a 3 percent reduction from a very small part (less than 20 percent) of the budget—domestic appropriations. It also includes a relatively small reduction ($35 billion over 5 years) in Medicare.... Even these limited proposals are highly likely to be rejected, however. The domestic programs the president is proposing... are... ones with the most political support in Congress.... If these changes had been easy to make, they would have been made years ago....

The Medicare reductions will be even harder to get enacted. Virtually every health care group... will vigorously oppose the president.... Congress may not be able to pass a... reconciliation bill... election year.

That doesn’t leave much... except for those things that will increase the deficit. Military, homeland security, interest on the debt, and entitlements will be higher in 2007 than they were in 2006. And, even though the proposals were not included in the Bush fiscal 2007 budget, we already know that additional spending for Iraq, Afghanistan, and Katrina will continue to be needed.

Why would the White House send Congress a 2007 budget that includes so much that won’t happen?

First, and most important, President Bush has put together a political platform.... Second, unrealistic proposals allow the White House to say that it is on target to cutting the deficit in half by the end of 2009...

Let's see how the Washington daily press corps does in its coverage:

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